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Sep 15 Technology for Social Impact

Zak Kaufman is the founder and CEO of Vera Solutions, a consulting company dedicated to improving efficiency within social impact orginizations by providing data collection and management software. Since starting the company in 2010, Vera has worked with over 235 organizations in 45 countries.

Mr. Kaufman graduated from Dartmouth College with a degree in Public Health in 2008. While at Dartmouth, he interned at Grassroots Soccer, a nonprofit in South Africa that teaches personal health adolescents, with special focus on HIV/AIDS awareness. While working as a data manager, he recognized an inefficient, one-way flow of information. So he sought to create software that would make it easier for everyone to monitor progress in students and track donation money.

To do this, he took the time to understand challenges that people faced in different parts of the organization, especially field instructors that interact with students. He used this feedback to create a Dashboard that could display all of the relevant data to the entire organization. He found that this software upgrade increased accountability and transparency in the group, allowing Grassroots Soccer to be even more effective with the students they served. Other nonprofits in South Africa took notice of Grassroots’ transformation and wanted to learn more about what Zak had done. The more groups he helped, the more Zak noticed a universal need for better data management software for nonprofits. Thus, he founded Vera Solutions, a company which matches social entrepreneurship with advanced technology to innovate the non-profit sector.

Zak visited Dartmouth’s campus during the winter of 2018, and we found some time in his busy visiting schedule to sit down and have a chat with him.

What is the Vera Solutions business model?

Vera is interesting in that it really is two companies in one. We are a growth stage consulting business and we’ve been incubating an SaaS [Software as a Service] within the company. We find organizations that have problems they’re looking to solve, or they find us. We work with them to find ways that we can improve their system or build a new one. We sign a scope of work to agree on [what] the project will look like. We run the project, and if the launch goes well, they adopt the new system, and we move on to work with other organizations. The system is designed to be a win, win, win, . . . win. Vera is winning by being paid for the work, the client is winning because they’re getting a system that saves them time, money, and headaches. Our staff are winning because they’re learning and having an impact by doing meaningful work. The beneficiaries of the organization are winning because they’re more effective in the work that they’re doing. So the world at large is winning as well.

What were some of the challenges you faced in starting Vera Solutions?

The first thing was that I didn’t know how to start a company. No one ever taught me that. I never learned it at Dartmouth, I never went to business school, and I didn’t learn it at the nonprofit I worked at. I think I really learned the importance of surrounding myself around really smart people that complement you and bring a different set of skills to the table. I was fortunate enough to have a partner who knew what we needed to do in setting up an LLC and running through the legal work that needed to be done there. . . . What I did learn though was that it wasn’t actually that hard to start a company, and I think that something that more Dartmouth students should know. If you have a really good idea, the barrier to starting a company isn’t that high.

What are some of the biggest challenges you’ve faced as CEO?

One of the biggest challenges was when both of my business partners exited the company. It was something that none of us could have foreseen. You start a company with three co-founders, and now you’re down to one, and one of the most important challenges is how to keep the company alive and well, so that we come out of that even stronger than before.

I think the other challenge is making sure that we’re growing at the right amount. The risk in consulting is if we grow too fast, it can compromise the quality of the work that we do. If we don’t grow fast enough, then we don’t have a big enough team to take on all of the clients that want to work with us. That’s a real challenge, striking the right balance and plotting the right growth trajectory for the company.

Another challenge is that we’ve never taken an investment. We’ve bootstrapped from the beginning, so we’ve only been able to grow the company with the money we have made from the services we have delivered. Fortunately, we have been profitable from the first year, and so we’ve used that money to grow the company, and that’s been critical to our success.

You described the consulting side of your business, but also mentioned that you're incubating an SaaS startup within it. Could you elaborate on that project a bit more?

Over the years, seeing a number of patterns and common needs from our clients, we were motivated to channel our learnings into packaged solutions that can cut down the initial investment (both time and money) required to get a system up and running and also generate recurring revenue. We launched our first product--a tool called Amp Impact that helps organizations manage grants and projects and track progress against performance indicators--in November 2017 and have about a dozen organizations using it already. The business model needed to make Amp Impact and other SaaS products successful differs greatly from the business model that has made our consulting business successful so far. It's been a fun and exhilarating learning curve and a real challenge ensuring the consulting company continues to thrive while we get our first product off the ground.

2. Over the past few decades, technology, especially software, has become an integral part of human society. In your experience, what do you think are the core elements needed to successfully merge technology with social impact?

Solution providers need to deeply understand the issues they're trying to solve. Success hinges on finding a powerful blend of domain expertise (in health, education, environment, justice, international development) with technical expertise (in programming, database design, mobile development, UI/UX design, analytics, blockchain, machine learning). Just as much as we need world class computer scientists putting their skills to use to solve societal problems, we also need social sector innovators to build their technology skills.

Are there any technologies or trends that you see that could disrupt the non-profit industry?

I’d say the best bet for identifying technologies that could be potentially disruptive for the social sector is to keep an eye on ones that are starting to disrupt the private sector. For example, over the last decade, there has been a significant uptick in the proportion of organizations—at least those in the US and Europe—using CRM tools for fundraising. This followed CRM market penetration in the private sector. We’re now in the early days of starting to see similar diffusion of innovation with analytics and visualization tools in the social sector. Data science has a great deal to offer the social sector, but non-profits and governments will only truly start to see the benefits of big data tools and technologies once they consistently have great quality data to begin with. If they become widely culturally acceptable, biometrics could be a real game-changer for addressing challenges associated with identifying individuals and duplicate counting in health, education, and poverty alleviation programs. Blockchain seems to be the ‘trendiest’ answer to this question. I do think it has potential, particularly when it comes to strengthening supply chain management of health products and other social goods, though the concept still to be proven at scale. Again, I’d watch efficiency-obsessed players in the private sector as first movers in this space and see what the social sector can learn from their pilots.

What do you think are some of the key lessons that you’ve learned in starting and running your company?

Coming out of a non-profit, I had this idea that profit was a bad thing or maybe that for-profit companies, by definition, had bad intentions. In starting a company, I came to learn that choosing a company structure (i.e. non-profit vs LLC vs C-Corp) is more about practice and practicality than about purpose. I’ve learned that it’s equally possible, and sometimes more practical, to pursue social impact through an LLC than it is through a 501c3. And I’ve also learned that — whether you run a for-profit or non-profit — a clear, compelling sense of purpose, a powerful organizational culture, and a healthy dose of humility are prerequisites to scale and sustainability.

Are there any lessons that you learned at Dartmouth that helped you in starting and running Vera Solutions?

My experience at Dartmouth, particularly the projects I worked on with the Dartmouth Center for Social Impact, played a major role in preparing me for work at Grassroots Soccer and ultimately for starting Vera. In addition to a range of experiences working with non-profits — in the Upper Valley as well as in Nicaragua and the Dominican Republic — I got invaluable practice starting organizations, building teams, running and marketing events, and raising funds.

What advice would you give to students and others who are thinking about starting a company?

Start by solving a problem that you know and understand intimately, not from a mindset of “I want to start a company.” Fail fast.